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|The Donut Hole Discount for Generic Drugs Increases in 2014|
|Published on 2013-08-19 14:31:59||Category: Donut Hole discounts|
The 2014 Donut Hole discount will remain at 52.5% for all brand-name medications purchased in the Donut Hole (you pay 47.5% of the retail cost and get 97.5% credit toward TrOOP) and the 2014 generic Donut Hole discount will increase to 28% (you pay 72% of the retail cost).
The generic drug Donut Hole discount is paid by your Medicare Part D plan and does not count toward TrOOP (getting out of the Donut Hole). The brand-name drug discount is split into two parts (this began in 2013).
Popular Question: So who is paying the Donut Hole discount and does the discount count toward getting out of the Coverage Gap?
The first portion, is a 50% discount paid by the drug manufacturer as it has been since 2011. The additional 2.5% discount is considered plan coverage and is paid by your Medicare Part D plan.
Since both the generic discount and this additional 2.5% brand-name drug discount are paid by your plan and considered plan coverage, they do not count toward getting out of the Donut Hole or meeting your True Out-of-Pocket costs (TrOOP).
Therefore, as is true in 2013, 50% of the brand-name discount – that portion paid by the manufacturer, will continue to count toward your TrOOP along with the 47.5% that you paid.
Here is an example of how this works: In 2014, if you buy a brand-name drug that has a retail price of $100, you will pay $47.50 (a 52.5% discount). For this Donut Hole purchase, $97.50 will count toward getting out of the Donut Hole (or meeting your 2014 TrOOP limit of $4,550 ) – the $47.50 you paid plus the $50 brand-name drug discount paid by the drug manufacturer.
The extra $2.50 portion of the discount will not count toward TrOOP because it was paid by your Medicare Part D plan and is considered plan coverage.
However, if you purchased a $100 generic medication while in the 2014 Donut Hole, you would pay $72 (28% discount) and only the $72 you paid would count toward your TrOOP or Donut Hole exit point.
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